The development of three-dimensional scaffolds for regenerative medicine has been slowed by the inability to form mature vascular networks within these scaffolds beyond a superficial depth. A bone defect site requiring a scaffold to promote healing has a low oxygen tension (0-3% typically) due to damage to the local vasculature that accompanies bone loss. In this proposal, we will evaluate the use of adipose-derived stem cell (ASC) aggregates seeded into a poly(ethylene glycol) matrix to drive angiogenesis. By placing these ASCs in hypoxic conditions (1-5% oxygen) we should increase the activity of the transcription factor hypoxia- inducible factor 1 (HIF-1). Hypoxia (and specifically HIF-1) is shown to trigger secretion of a cocktail of angiogenic factors. This allows us to create an environment within our scaffold that more accurately mimics the one seen during physiological angiogenesis. Another advantage of a system utilizing ASCs for delivery is the intrinsic capability of the cells o integrate into the forming vessels as well as bone as ASCs can differentiate into endothelial cells, smooth muscle cells, pericytes and osteoblasts. The environment we hope to create should represent an advance over systems that drive vascular ingrowth through controlled release of a single factor such as VEGF. By preconditioning the ASCs prior to transplantation into the hypoxic environment of a bone defect site, we may be able to extend viability. The optimal method to achieve this is still a subject of investigation. The use of ASCs to both promote vascular infiltration of constructs as well as their potential integration into these vesses is an emerging research area. This proposal will look at a number of important encapsulation and culture conditions which can impact the success of such systems. We will study different preconditioning approaches which have not been reported. In addition, we will utilize a novel enabling technology which will allow us to track the rate and extent of hypoxic signaling for encapsulated ASCs. Our specific aims and experimental procedure will establish a relationship between the ASC encapsulation conditions, local oxygen tension and cell phenotype. Optimizing these parameters should advance the field of bone tissue engineering. We will evaluate ASCs as dispersed single cells, small aggregates and large aggregates at 20% oxygen as well as 3 different levels within the hypoxic regime. Cell viability, expression of pro- and ant-apoptotic proteins, secretion of angiogenic factors and tracking osteogenic differentiation of the ASCs are some of the assays that will be performed. We have also developed a responsive, fluorescent marker to track hypoxic signaling at an individual cell level which can be used for encapsulated cells. This marker correlates well with other methods of tracking HIF-1 activity and represents a novel, enabling technology to further analysis of hypoxia within tissue engineering scaffolds.